It’s about time for us to uncover our eyes and take a hard look at what 2013 did to our finances.
Did you feel the pinch of the 13 tax hikes that hit Americans this year?
Before you review the list below, put these two on your watch list for 2014:
- Obamacare’s individual mandate. Beginning in 2014, it’s mandatory to purchase health insurance. If you don’t, you’ll pay a penalty that dramatically increases over time. It starts at $95 or 1 percent of your income (whichever is greater). It rises to $325 or 2 percent of income in 2015, and $695 or 2.5 percent of income in 2016.
- Obamacare tax on insurance companies. If you liked seeing your premiums go up, you’ll love this new tax on health insurers—which they are most likely to pass on to you.
As you start reviewing your tax information for 2013, here’s what you’re contending with.
The 13 Tax Increases of 2013
1. Payroll Tax: increase in the Social Security portion of the payroll tax from 4.2 percent to 6.2 percent for workers. This hit all Americans earning a paycheck—not just the “wealthy.” For example, The Wall Street Journal calculated that the “typical U.S. family earning $50,000 a year” would lose “an annual income boost of $1,000.”
2. Top marginal tax rate: increase from 35 percent to 39.6 percent for taxable incomes over $450,000 ($400,000 for single filers).
3. Phase out of personal exemptions for adjusted gross income (AGI) over $300,000 ($250,000 for single filers).
4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).
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